Deal of the week
This week, I want to focus on one deal that appears to be at risk.
Institutional Shareholder Services Inc., an influential shareholder adviser, issued a report this week recommending that investors in Ken Moelis’s Atlas Crest Investment Corp. should vote against a merger with Archer Aviation. The adviser said it would be better for investors if they redeemed their holdings in the blank-check company for cash.
If investors take that advice, it could derail the proposed merger between Atlas Crest and Archer, a startup that is developing vertical take-off and landing electric aircraft. ISS argues that Archer’s legal battle with Wisk Aero puts the company at risk. The firm also points to the falling valuation of the combined company.
As Bloomberg noted this week, ISS has targeted other SPAC deals involving eVTOL companies. ISS opposed the merger between Reinvent Technology Partners and Joby Aviation. Shareholders ignored ISS and vote to approve the merger. ISS also advised against investing in Qell Acquisition Corp.’s merger with Lililum GmbH. That deal is still pending.
While ISS seems to have a general distaste for eVTOL SPACs, the Archer deal is particularly sticky due to its current legal wrangling with Wisk Aero. For those who haven’t been following: Wisk Aero, the air mobility company born out of a joint venture between Kitty Hawk and Boeing, filed a lawsuit in April against Archer Aviation alleging patent infringement and trade secret misappropriation.
Archer didn’t scuttle into a corner. The company countersued in a lawsuit seeking $1 billion in damages from Wisk Aero.
Investors won’t be able to take the wait-and-see approach. The vote to approve the SPAC merger will be held long before this legal fight is resolved.
Other deals that got my attention this week …
Carsome Group, the Malaysian-based online marketplace for buying and selling used cars, raised $170 million from investors, including from semiconductor maker MediaTek, investment company Catcha Group and Malaysian government fund Penjana Kapital, Forbes reported. The company’s post-funding valuation is $1.3 billion.
Cox Automotive acquired Oklahoma City-based Spiers New Technologies (SNT), a business that provides repair, remanufacturing, refurbishing and repurposing services for EV battery packs. The two companies did not disclose the terms of the deal.
Foretellix, a company that has developed a platform to verify and validate automated driving systems, raised $32 million in a Series B funding round led by MoreTech Ventures, with participation from several strategic investors, including Volvo Group, Nationwide, NI and Japan-Israel Ventures. Previous investors 83North Ventures, Jump Capital, OurCrowd and NextGear also participated. The company, founded in 2018, has raised more than $50 million to date.
Gatik AI, an autonomous vehicle startup focused on middle-mile logistics, announced it’s expanding into Texas — its fourth market — with a fresh bundle of capital. Gatik said it has raised $85 million in a Series B round led by new investor Koch Disruptive Technologies, the venture arm of Koch Industries. Existing investors Innovation Endeavours, Wittington Ventures, FM Capital, Dynamo Ventures, Trucks VC, Intact Ventures and others also participated. Gatik has raised $114.5 million to date.
HAAS Alert, a SaaS company that provides real-time automotive collision prevention for public safety and roadway fleets, raised $5 million in a seed funding round led by R^2 and Blu Ventures and joined by TechNexus, Stacked Capital, Urban Us, Techstars, Ride Ventures and Gramercy Fund. The company says it will use the funds to scale sales and outreach efforts and prioritize R&D with vehicle-to-vehicle and vehicle-to-infrastructure (V2X) technology partnerships.
Ideanomics, a fintech and electric mobility firm based in New York, acquired commercial electric vehicle manufacturer Via Motors in an all-stock deal valued at $450 million.
Iconiq Motors, a Chinese electric vehicle firm, is considering going public in the U.S. through a merger with a blank-check company, Bloomberg reported. The startup is working with an adviser on a potential deal that could value the combined company at about $4 billion, according to one source cited by the media outlet.
Kevala, the startup that collects and analyzes energy grid infrastructure data for utility companies, renewable energy providers, EV charging companies, regulators and other energy industry stakeholders, raised $21 million in a Series A round. The company says it will use the funds to grow its team from 60 employees to around 100 by the end of 2021 and increase the deployment of its grid analytics tools.
Sunday, an insurtech startup based in Bangkok, raised a $45 million in a Series B round that included investment from Tencent, SCB 10X, Vertex Growth, Vertex Ventures Southeast Asia & India, Quona Capital, Aflac Ventures and Z Venture Capital. The company says the round was oversubscribed, and that it doubled its revenue growth in 2020.
Yandex, the Russian internet giant that also operates a ride-haling company, acquired Uber’s stake in its Self-Driving Group (SDG), as well as Uber’s indirect interest in Yandex.Eats, Yandex.Lavka and Yandex.Delivery. The total cost of the deal came to $1 billion, giving the Russian company 100% ownership over all four businesses.
Zeekr, the electric vehicle brand by Geely, raised $500 million in its first external funding from a list of investors, including Intel Capital, battery maker CATL and online entertainment firm Bilibili. The round puts Zeekr’s valuation at aboout $9 billion, Reuters reported.
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